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Posted July 6th, 2012 by Charles Purdy

EURO/GBP Rate & Comments for 6th July 2012

EURO/GBP 1.2536

Sterling had a mixed week rising to €1.255/£1 against the euro; but, dropping back down to US$1.550/£1 against the US dollar. The main reason for the loss of ground against the US$ was the Bank of England announcement that it will inject a further £50billion pounds into the economy though quantitative easing. A lot of focus has been given to Barclays former boss Bob Diamond as the LIBOR fixing scandal developed which the markets fear could spread to many other banks which in turn would severely damage the UK’s financial market as a whole. Mixed Purchasing Managers’ Indices (PMI) figures were released in the week with the biggest shock coming from the construction industry which showed a contraction when expansion had been anticipated. Inflation data in the form of the Producer Price Index (PPI) is the only significant data released today as the markets pay closer attention to the Non-farm payroll data being released in the US. Call in now for the latest news and a live quote.

The euro had an extremely poor week which was epitomised by the European Central Bank’s (ECB) decision to cut interest rates to 0.75% yesterday. This saw the euro tumble against the majority of currencies. Whilst the rate cut was widely expected, it disappointed the market as it underlines the weakness of the Eurozone in general. On the data front, unemployment in Europe reached a record high of 11.1%; whilst PMI data released also confirmed the Eurozone is in recession which goes someway to explain the ECB’s decision to cut the central bank interest rate. German industrial production figures is the only data of note released today as the markets absorb the vast quantity of data announced yesterday whilst looking towards the US for influence. Call in now for the latest quote and a live update.

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